Taught To Maximize Profits, Driven To Make A Difference

By:Rob Everetts

Monday, November 10, 2014

"Prosperity in a society is the accumulation of solutions to human problems." - Eric Beinhocker and Nick Hanauer, McKinsey Quarterly, 2014.

This quote speaks to me. It’s simple yet profound. It actually summarizes why three years ago I chose the Kelley Evening MBA program over some of the other offerings out there: they offered a track for someone interested in Social Entrepreneurship, meaning I would find like-minded individuals there who sought knowledge to help develop solutions that might not be primarily focused on profits. The idea that an MBA program could be aligned with my budding personal interest in social ventures was attractive.

This past spring semester, I had the opportunity to be part of two incredible projects that would make the entire EMBA program worth the 3.5 years of personal sacrifice. One was the life-changing trip to Liberia, which I’ve written about previously (here and here). The other was a project for a social entrepreneur seeking to make a difference in the Dominican Republic.

Dave Addison is a former Wall Street banker and also former military. You can imagine the person who comes out of those two professions to be highly disciplined and focused, and that he is. What you might not expect, however, is someone focused solely on helping ensure the human security of the world’s poor. (For a brief overview of human security, visit the Wikipedia page about it.) He even has a master’s degree in it.

Dave founded 7 Elements (7e) several years ago and has been hard at work developing solutions to the human problems of food, health, environmental, personal, community, and economic security (he doesn't have much interest in getting involved in politics and thus leaves political security to the NGOs that specialize in that arena). His primary business model is hosting travelers who are interested in working on the projects he initiates in the villages of northern Dominican Republic. Historically, those interested travelers have mostly been high school students.

His problem? He built an eco lodge (above) that spends most of the year empty because high schoolers (who provide the majority of the labor for the projects being built in the DR villages) only come during spring and summer breaks. How could he attract more people (i.e., adults) throughout the year?

My DIVE team’s assignment: Help 7e answer the question with a marketing strategy.

Our assignment included a trip to the DR to stay at the eco lodge in February. We were able to meet dozens of the villagers 7e was impacting. From a coffee co-op, to a honey maker, to artists, to Haitian refugees struggling to cook, we met so many people crippled by the poverty of their past and present, all of whom met Dave with a smile. Despite their past, however, many of them learn from Dave and have boosted their livelihoods from Dave’s lessons on sustainability. That’s what keeps him going. It certainly moved us all as well.

We delivered a plan that included strategies for developing new partnerships to attract adult tourists (specifically corporate sustainability travel) to the lodge, strengthening the 7e brand, and outside sources of funding.

In the vast majority of MBA classes, we learn to maximize profits. Varying across courses in terms of how to make that happen (set marginal costs equal to marginal revenues in the theoretical economics model; modify your accounting system and processes in that world; target large markets with large margins and hire someone with the expertise to work out the finances according to venture strategy), it is a repeated mantra. Make lots of money for your company. Or at least ensure the company is healthy and doesn't operate on a loss.

But I tend to interpret it the way Dave does: maximize benefits. It’s a small difference, and it precludes neither maximum profits nor a sound business model. What I think it does is remind myself (and hopefully others through my work) that a capitalist market doesn't by nature have to benefit only a few at the top while ignoring the rest of our global citizens. A balanced model means that if you’re lucky enough to have risen to the top, you should “send the elevator back down.”

The nice thing about the Kelley MBA program is that I've had my eyes opened to how to teach. I can help guide people how to sustain themselves. Help doesn't need to (nor should it ever) come exclusively by way of charity. The world’s poor need the ability to solve their own hunger problems, to create their own thriving communities, to educate their young, and to be healthy. This applies not only internationally but also right here at home.

I’m humbled to have been valued by the people we attempted to help. I look forward to doing it more often. Most of all, I hope others will join the movement.

Note: I wrote this post several weeks ago, and now find myself posting it from my hotel in Minneapolis while at the Net Impact 2014 conference. The purpose of this conference is to push forward the notions I've outlined above. I will write a post at the end of the conference about my experience here and put a call out for interested Indy EMBA students to join me as I attempt to start our very own Net Impact chapter. Find out more at http://www.netimpact.org.